Page 1 of 4

WHITE PAPER: OBSERVATIONS ON FACTORS INFLUENCING CUSTOMER SATISFACTION AND THE EFFICACY OF VESSELVANGUARD TO SIMPLIFY THE SALES PROCESS AND CUSTOMER RELATIONS FOR BOAT MANUFACTURERS AND DEALERS Salient Points:

How Customer Satisfaction is Vulnerable to the unfulfilled intentions of the Boat Owner How Dealers and Manufacturers Rely on a Proactive Owner and Loose Control Over

Customer Satisfaction How the Paper Based Information Model of Operating Manuals and PM Schedules is

Inconsistent with Customer Behavior The Paradox between 21st Century Boating Technology and the Paper Based Information

Model Transaction Costs Forced on Dealers and Manufacturers by Uninformed Owners

PRIMARY PREMISE VesselVanguard provides a range of benefits to the boat owner with the high order goals of improving the owner’s knowledge of and response to the maintenance needs of the boat, and preservation of asset value. Additionally, VesselVanguard simplifies the sales and customer relation’s process by providing current and ongoing benefits to the boat manufacturer and dealer - at no cost or investment by them. This paper focuses on those benefits most relevant to dealers and manufacturers. A modern vessel regardless of cost does not exist in a frozen state of perfection as on the day of delivery. If left alone the nature of the boat and its operation will change all by itself. It only exists as an amalgam of design, experienced workmanship, equipment that produces a promised function, understandable instructions, and the willingness of the owner to properly use and maintain it. Information shares one property with tangible goods; it is not indestructible. Value can be destroyed as surely as function because at a critical moment information was ignored. Functionality, Value and Customer Satisfaction are fully co-dependent forces. Stripped to its functional parts the boat around which these challenges exist is an aggregation of form and equipment that can locate itself on the globe within a two foot tolerance, provide world-wide personal and emergency communications, can be programmed to chart a course and steer itself to a destination, process water, make electricity, provide lighting, heat and air-conditioning, purge itself of waste, provide personal comfort and entertainment to many people, and yet, at the point of delivery the operating manuals and maintenance schedules for this city on the water are delivered in a thirty pound box of books with almost total reliance upon the motivation of the owner-operator to read and comprehend those printed pages. The delivery model culminating in the transfer of those many pounds of manuals may never be altered for practical reasons, but the presumption that the owner will read this mountain of material is nonetheless inconsistent with the way in which the boat owner seeks and uses information in all other aspects of his life. Clearly this is a conflict that has costs to all parties.

Page 2 of 4

OVERVIEW OF THE INFORMATION SOLUTION VesselVanguard is an innovation that replaces an inefficient paper-based search model dependent upon a proactive human. The solution is a web-based “search engine” specific to the Owner’s vessel and its full complement of equipment and owner defined tasks. By converting all operating manuals and attendant preventive maintenance schedules into a dynamic data environment VesselVanguard inalterably replaces the status quo of the paper based model with one that reflects how the boat owner interacts with information in all other aspects of their lives. How does the VesselVanguard benefit the Manufacturer and Dealer? How does it simplify the customer relationship while saving time and money for all concerned? When introduced to the Customer at the moment of sale VesselVanguard.com eliminates further discussion and concern about maintenance coordination as well as the customer knowledge gap pertaining to all equipment and systems. VesselVanguard.com enhances the relationship between owner, dealer and manufacturer by eliminating the friction and transaction costs inherent in the status quo model saving the manufacturer and dealer time and money. VesselVanguard assumes the responsibility to incorporate manufacturer updates into the ships log and to efficiently inform the customer of their responsibilities so the Dealer doesn’t have to. ON HOW BOAT MANUFACTURERS (BM) AND EQUIPMENT MANUFACTURERS (EM) LOOSE CONTROL OVER CUSTOMER SATISFACTION All dealers maintain contact with their Customers after the sale for good reasons including their natural affinity and care for the customer or for resolution of specific obligations. However, the quest by all dealers and manufacturers to achieve the highest level of customer satisfaction and earn customer loyalty is vulnerable to certain realities beyond their control which dictate the ultimate outcome. Those realities include: BM & EM provide the Customer with necessary information at the point of sale after which the

information and what happens next resides with the Customer. The quality of the Customer’s on-the-water experience is dependent upon his willingness to

optimize it through use of this information. The Customer rarely or infrequently refers to this printed information after it is delivered to him –

yet his entire satisfaction with the product is dependent upon his use of the information and adherence to its maintenance schedules.

In the digital age people seek information on an as-needed basis, expecting gratification from digital libraries accessed through key word search-engines which deliver immediate results. Any divergence from this model appears archaic by comparison and fosters dissatisfaction.

ON THE PARADOX BETWEEN 21ST CENTURY MARINE TECHNOLOGY AND THE INFORMATION MODEL USED TO TRANSFER IT TO USERS The Boat Manufacturer and Dealer is caught in a paradox: The Manufacturer produces a highly

sophisticated 21st century product with advanced materials and systems, and then relies upon a paper based resource to deliver the information needed to operate and maintain those systems.

Page 3 of 4

As much as the Customer should read and understand all of this data, as it stands today, this task exists as a “permanent intention”.

The reason: The printed word of the Operating Manual and its Maintenance Schedules is out of synch with the methods used by the Customer to attain knowledge in all other aspects of his life where Information is not valued until it is needed.

Customers have become search engine reliant yet the information model employed by BM & EM is the “anti-search engine”, relying upon the presumption of proactive Customer-driven acquisition of knowledge.

Customer dissatisfactions begin when answers must be developed through his own effort. To achieve all levels of satisfaction first envisioned by the owner, (their expectation), they need a

“My Boat” specific search engine that mimics those information channels to which they are now accustomed.

CUSTOMER SATISFACTION IS A VULNERABLE GOOD Fact: In addition to making a sizable financial investment, the Buyer makes a powerful emotional

investment in a lifestyle represented by the boat ownership. Those emotions cannot be quantified financially but once breached are difficult to reinstate.

Fact: Most boat purchasers are unprepared for the routine maintenance obligations necessary to

satisfy their varied expectations. The Boat Dealer believes that they have made these obligations clear to the Buyer but the Buyer is not listening to messages that interfere with those emotional lifestyle images.

Fact: At the moment of delivery the Dealer and Manufacturer transfer to the Buyer the primary

responsibility to achieve the satisfactions represented by the Boat. Any “hand-holding” by the dealer ends at the dock yet it is at that point where the relationship become vulnerable to the “surprises” of ownership experienced by the owner.

Fact: Information delivered to the Owner in advance of need eliminates uncertainty and creates a

continuum of knowledge between all parties. Once known those responsibilities may be delayed but the knowledge and responsibility cannot be avoided.

Fact: The Manufacturer seeks to deliver high levels of customer satisfaction to its entire fleet, but

despite the intrinsic qualities of the product this value judgment is vulnerable to the willingness of its fleet of owners to be informed and act on that information. This value measurement is almost entirely outside the realm of the manufacturer to influence without the cooperation of the Buyer.

Fact: All systems are important regardless of cost and never more so than when they fail. On a

boat, multiple independent systems must function as a whole, and if one system malfunctions its impact is magnified throughout the entire environment in the form of dissatisfaction. These systems are linear and co-dependent. The $25,000 navigation system can be working perfectly but if the GPS wiring has faulted the system fails to function. If the $2,000 winch freezes up then the $40,000 sail rig cannot function properly.

AN UNINFORMED OWNER CREATES REAL TRANSACTION COSTS FOR THE DEALER AND MANUFACTURER Any time friction occurs in the customer relationship, there is both a financial and a psychic cost

regardless of where direct responsibility lies.

Page 4 of 4

What is the Value and Cost of customer dissatisfaction even when it is a customer omission? At

what point does it cease to matter where the fault lies? Reality: If you “torture” the relationship enough with shifted responsibilities the customer will

always confess that you are at fault. Before the sale all customer questions are valuable to a listening salesman as they lead to the

action steps necessary to make the sale. But, under the status quo what is the financial cost of an unnecessary service call when those answers are otherwise available in books and manuals? Is it $100 per occurrence? Is it $2,000 per boat per year? The measurable aggregate cost of the status quo method is specific to each dealer and manufacturer organization but must easily be tens of thousands of dollars a year distributable across the organization.

THE VESSELVANGUARD.COM SOLUTION EXPANDED The “My VesselVanguard” maintenance calendar and data file (and other website features) is presented to the customer intact without the need for individual initiative. Customer uncertainty is replaced with the constant vigilance of VesselVanguard.com. The customer pays for this system at no cost to the dealer and manufacturer yet the dealer and manufacturer are co-beneficiaries for the life of their ownership. VesselVanguard is a “Boat Specific Search Engine” customized to the on-board equipment and adaptable to owner preferences, with fidelity to the details specified by the manufacturers. Task alerts emailed in advance of their due dates to the owner and third parties provide answers before they are asked thus avoiding costly and time-consuming communications with dealers and manufacturers. VesselVanguard replaces unnecessary service calls by giving the Customer an effortless interface, a search engine, by which he can seek and find answers on an as-needed basis. The buyer-seller relationship can now be focused on positive aspects of the functioning product and other personal linkages emblematic of the boating lifestyle without effort or cost to the manufacturer. Recall Notices and Service Bulletins are directly routed into the “My VesselVanguard” calendar and issued as immediate “Task Alerts” to all parties, thus satisfying the manufacturers notification requirements and limiting liability. In a non-judgmental and non-confrontational manner the Owners’ responsibilities are routinely communicated to them and all other interested parties by VesselVanguard without the unnecessary involvement or oversight of the Dealer and Manufacturer. The Owner receives these and many on-going multiple benefits from their VesselVanguard.com subscription for which the Dealer can take credit. ___________________________________________________________________________ Prepared by Donald V. Hyde, Founder, CEO, Vessel Metrics, LLC, dba, VesselVanguard.com